A Chinese company launched work Monday on a $50 billion canal across Nicaragua, an ambitious rival to the Panama Canal that skeptics dismiss as a pipe dream and protesters say will wreck the environment.

The Chinese telecoms magnate behind the canal, Wang Jing, inaugurated the project at a ceremony in the southern town of Rivas that was moved forward by several hours after anti-canal activists called protests.

"Today we are going to begin initial work on the Nicaragua canal with the support of the government, the understanding and strong support of the Nicaraguan people," Wang said in Rivas, the epicenter of three months of demonstrations against the canal.

Hundreds of protesters blocked the highway connecting the region to the capital Managua, despite what community leader Octavio Ortega called a "militarized" response from security forces in the region.

In Managua, where President Daniel Ortega was due to hold a separate ceremony in the evening, environmentalists called for the release of the project's feasibility studies.

Construction will begin with the first access roads at the mouth of the Brito River on the Central American country's Pacific coast.

Wang's Hong Kong Nicaragua Development Investment (HKND) company says 300 workers will build the roads and a port, the first of 50,000 people who will be hired to construct the massive 280-kilometer waterway connecting the Pacific Ocean and the Caribbean Sea.

The firm estimates the project will take five years.

That is half the time it took the United States to complete the Panama Canal 100 years ago, considered one of the greatest engineering feats of the 20th century.

- 'Historic date' -

Nicaragua, which fought Panama then to host the first canal across Central America, has now reemerged as a modern-day rival.

The canal route crosses Lake Nicaragua, the largest freshwater reserve in Central America, and runs through rainforest and at least 40 villages before terminating at the mouth of the Punta Gorda River in the southern Caribbean, where another port will be built.

The project also includes an international airport and a free-trade zone with residential and tourism facilities.

Both ports and the canal will be designed to handle the modern mega-ships favored by global shipping firms, which can carry up to 25,000 containers.

That dwarfs the current capacity of the 80-kilometer Panama Canal to the south, which can only handle ships carrying 5,000 containers.

A $5.25 billion expansion of the Panama Canal, scheduled for completion in early 2016, will enable it to handle ships carrying 12,000 containers.

Ortega, the leftist president who has ruled Nicaragua for 18 of the past 35 years, hopes the new canal will make his country the richest in Central America.

Three billion cubic meters (106 billion cubic feet) of earth will have to be excavated for the canal, which will be between 230 and 520 meters wide (750-1,700 feet) and 30 meters deep, allowing it to handle ships of up to 400,000 tonnes.

The project will also displace 30,000 farmers and indigenous people from the Rama and Nahua ethnic groups who live along the canal route.

Maya Collombon, The Conversation: Work has begun on a new canal route in the Panama region, in what is one of the most ambitious infrastructure projects of our time. The Interoceanic Grand Canal of Nicaragua will take five years to build over some 278 miles, traversing several major rivers and Lake Nicaragua. [ . . . ]

Like a wound from the past, my country holds the memory of an interoceanic canal that was never constructed but still traversed our country and changed our history. – Gioconda Belli, The Country Under My Skin, 2002

EXCERPT:

The Interoceanic Grand Canal

The Nicaragua Interoceanic Grand Canal project is indeed a reincarnated dream. Historians have recorded 72 previous plans for it, spanning 500 years and involving such infamous leaders as Louis Napoleon Bonaparte III and such outrageous means as nuclear explosions. The current incarnation involves a 278-kilometre canal that begins in Brito on the Pacific side, passes through the huge Lake Cocibolca (Lake Nicaragua), and then extends through the autonomous lands of the Rama and Creole peoples along the Punta Gorda River to the Caribbean Sea. Beyond the 105-kilometre passage through the lake, the canal’s path traverses 100,000 hectares of primary forest, two of three national biosphere reserves, six conservation areas, and the habitats of 22 endangered species, including tapirs, jaguars, manatees, freshwater sharks, and five species of sea turtle.

The Nicaragua canal will dwarf Panama’s century-old 77-kilometre canal and allow the passage of new Ultra Large Container Ships (ULCS) that carry up to 25,000 shipping containers each (for perspective, the Panama Canal currently accommodates 5,000-container ships but is expanding to accommodate 12,000-container ships). The work of dredging and keeping the route free of sludge for the passage of such gargantuan vessels includes the excavation of five billion cubic metres of material – mostly from the bottom of the massive lake, which is Central America’s largest reserve of freshwater and rich in biodiversity.

Eight sub-projects are being contemplated, including access roads, two ports, an airport, a free-trade zone, a cement factory, a tourist resort, and housing facilities. Current costs are projected at US $50 billion – about five times Nicaragua’s annual GDP – but are likely to rise significantly. Supported by the government of former Marxist revolutionary Daniel Ortega, the project is to be funded by the enigmatic Wang Jing, a Chinese telecommunications billionaire, traditional Chinese medicine practitioner, and chairman of the Hong Kong Nicaragua Canal Development Investment Company (HKND), a privately held company with no documented experience in infrastructure projects. Thanks to sweeping and quickly implemented legal reform in Nicaragua, HKND was granted a 50-year renewable concession for the project. The investors supporting the project remain unnamed.

Even with only one per cent of the profits to go to Nicaragua during the first 10 years of the concession, proponents claim that the project is the fastest way to pull Nicaragua out of poverty and address the almost 50 per cent underemployment rate. Telémaco Talavera, Ortega’s appointed Canal Commission spokesperson, boasts that Nicaragua’s economy will grow to double digits, and that the project will create 50,000 jobs during construction and 200,000 afterward. The fine print in HKND’s plan, though, suggests only 25,000 construction jobs for Nicaraguans, and gives no clear post-construction employment projections. Such optimistic bias does not go unnoted. Respected independent economist Adolfo Acevedo notes that 25,000 jobs represent only 0.6 per cent of the total labour force. Further, he suggests that given the planned confinement of workers to company camps, from which outsiders are strictly prohibited, the likelihood of the project benefiting even informal labour such as food vendors is very low.

Yet, “what else were they going to do?” muses political analyst Frederico, who wishes to remain anonymous. “You can’t depend on agriculture to get us out of poverty, the international investors aren’t creating much employment, and tourism isn’t enough.” Nicaragua exceeded four per cent growth again in 2014, but it would take 40 years to get out of poverty at current economic growth levels. Besides, he says, “elections are less than two years away. This canal is an outcome and an expression of the crisis in governance.”